Correlation Between Valens and MaxLinear
Can any of the company-specific risk be diversified away by investing in both Valens and MaxLinear at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Valens and MaxLinear into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Valens and MaxLinear, you can compare the effects of market volatilities on Valens and MaxLinear and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Valens with a short position of MaxLinear. Check out your portfolio center. Please also check ongoing floating volatility patterns of Valens and MaxLinear.
Diversification Opportunities for Valens and MaxLinear
Good diversification
The 3 months correlation between Valens and MaxLinear is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Valens and MaxLinear in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MaxLinear and Valens is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Valens are associated (or correlated) with MaxLinear. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MaxLinear has no effect on the direction of Valens i.e., Valens and MaxLinear go up and down completely randomly.
Pair Corralation between Valens and MaxLinear
Considering the 90-day investment horizon Valens is expected to generate 0.84 times more return on investment than MaxLinear. However, Valens is 1.19 times less risky than MaxLinear. It trades about 0.14 of its potential returns per unit of risk. MaxLinear is currently generating about 0.07 per unit of risk. If you would invest 185.00 in Valens on August 24, 2024 and sell it today you would earn a total of 22.00 from holding Valens or generate 11.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Valens vs. MaxLinear
Performance |
| Timeline |
| Valens |
| MaxLinear |
Valens and MaxLinear Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Valens and MaxLinear
The main advantage of trading using opposite Valens and MaxLinear positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Valens position performs unexpectedly, MaxLinear can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in MaxLinear will offset losses from the drop in MaxLinear's long position.| Valens vs. Wolfspeed | Valens vs. GSI Technology | Valens vs. Lattice Semiconductor | Valens vs. ON Semiconductor |
| MaxLinear vs. Eshallgo Class A | MaxLinear vs. Amtech Systems | MaxLinear vs. Gold Fields Ltd | MaxLinear vs. Aegean Airlines SA |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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